Closing Protection Coverage
Effective January 1, 2007
Pursuant to Section 3953.32 of the Ohio Revised Code, effective January 1, 2007, every real estate closing involving real property in Ohio in which title insurance is to be issued, the title insurance company or title insurance agent must offer closing protection coverage to the lender, buyer/borrower, and seller in the form of a Closing Protection Letter mandated by the Ohio Department of Insurance.
If the lender chooses to elect Closing Protection Coverage, a premium of $35.00 payable to the insurance underwriter will appear on the settlement statement. If the borrower also elects coverage, the charge will be $50.00 ($35.00 for lender’s coverage and $15.00 for borrower’s coverage). If a Seller chooses coverage their charge will be $50.00. The coverage is limited to the specific transaction and is described on the Notice of Availability, an excerpt of which follows:
Description of Coverage: The Closing Protection Coverage indemnifies you against the loss of settlement funds resulting from any of the following acts of the Licensed Agent or anyone acting on behalf of the Licensed Agent, subject to certain conditions and exclusions specified in the Closing Protection Coverage Form:
1) Theft, misappropriation, fraud, or any other failure to properly disburse settlement, closing or escrow funds; and
2) Failure to comply with any applicable written closing instructions, when agreed to by the Licensed Agent.
All parties to the transaction must complete the Notice of Availability and Offer of Closing Protection Coverage. The documents must be signed by the lender and returned to the title agent prior to the issuance of a Closing Protection Letter and prior to closing. These documents are transaction specific, and will be sent to you when title work is started. Click here for a copy of the Notice of Availability and Offer of Closing Protection Coverage and an example Closing Protection Coverage